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Mr Speaker, Sir, thank you for allowing me to join this debate.
I support both bills and I will speak on the Retirement and Re-employment Act.
I declare my interest as NTUC’s representative in and a member of the Tripartite Workgroup on Older Workers whose report was adopted by Government. That report was titled “Strengthening Support for Older Workers”.
The Report contained 22 recommendations. Of the 22, the 3 most prominent recommendations pertain to the progressive raising of the statutory retirement age from 62 to 65 by the end of the decade (2030), the corresponding progressive raising of the reemployment age ceiling from 67 to 70 over the same time frame, and the progressive improvement of CPF contribution rates for both employers and employees for workers aged 55 to 70.
The Retirement & Reemployment (Amendment) Bill and the Central Provident Fund (Amendment) Bill before the House today are to give legislative effect to these recommendations so that they can be implemented for the benefit of workers and companies.
Sir, I think there is a good analogy between what we are trying to do to address the oncoming needs of our aging local workforce and the companies employing these workers, and compared with our national efforts to address the serious challenges brought about by climate change.
I wish to draw the similarity to frame it in such a way to make it easier for all of us inside and outside of this house to see what we are trying to do. The first similarity is that both challenges, aging population and aging workforce and climate change, are very damaging if not properly addressed.
In the case of climate change, one specific known threat to Singapore would be that of global warming leading to rising sea levels. In that scenario, if we do not build up sufficient defences early and well enough, the result will be a loss of coastal areas as the sea level rises. This is why the Government, as announced by Prime Minister as has begun to be put into budget, will invest heavily to raise the foundation level of critical infrastructure to be well above current sea levels and to build sea walls to increase coastal protection.
We must do likewise for our aging local workforce, so that they are not only better protected but would continue to be a valuable contributor to our economic dynamism.
Sir, ageism exists throughout the world. It is not right. It is not good. It is not fair but it is there, to a greater or lesser degree. On this journey that we want to be on to reduce it or eliminate it some day, we continue to have deal with the reality that while it exists, and it does now, what is it that we must do to accord the attention for our workers.
For this reason, the Tripartite WorkGroup debated long and hard on whether a statutory retirement age for older Singaporean workers is still relevant and needed in Singapore for the next 10 years or so. It concluded that it is needed. I hear several members speaking about the need for that and I want to give a little bit of background behind the thinking when we debated this within the workgroup. The basic question we ask ourselves is supposing there is no ageism in the workplace, and therefore employers are more than happy to employ older workers who are happy and willing to work. Then it is okay with these companies if we have a statutory retirement age. The company will just continue to employ. They are not in anyway held back by a statutory retirement age. But in the opposite scenario where you have companies whose practices are ageist, then it is not so simple. In the absence of some strong signal from the tripartite partners, from the government in law, we can understand that these tendencies will become more pronounced.
As it is we hear examples already cited that residents come to us that some of them have been let go of as they get into the middle age. And they find it more difficult to get a new job and when they do get a new job, chances of not matching the old terms is quite high. We ask ourselves if there is no ageism around and age equals experience, equals value fully appreciated then why are we having these scenarios. If we are having these scenarios, why is it therefore not good for us to put in the necessary protection. In summary, if there’s no ageism, having a statutory retirement does no harm. If there is, this gives a strong signal (to employers) to not resort to ageist practices so easily.
Beyond the legality of it, it also sends a clear signal to employers on what the Tripartite Partners want businesses and organisations to focus on – namely, to find and put in place effective ways to keep their older workers sharp on the job and not cause them to become a liability, or a liability prematurely.
I certainly support further efforts to protect older workers against ageist workplace practices. I look forward to the outcomes of the tripartite workgroup on workplace discrimination that MOM initiated a few months ago.
The Statutory Retirement Age and the Re-employment Age ceiling are like a pair of sea walls build for our older workers. They stand as visual reminders of the nation’s commitment to protecting our older workers as a asset. This is not merely done to achieve some philosophical ideal but for very practical reasons. It affects the lives of our people. It affects the livelihoods of our workers, their retirement.
Sir, the first move to improve CPF contribution rates was originally to take place in January 2021, with the increase in Retirement and Reemployment ceiling ages following in 2022. But as we knew, Covid-19 hit us last year and as a result the tripartite partners discussed how to do this is in a way that doesn’t derail the entire intent but take into account the circumstances that we have to face.
As a results, we agreed to delay of implementation of the CPF rates for a year, hence January 2022 but to keep in place, the planned increase in the reemployment and retirement ages in July 2022. This safeguards the longer-term resilience while attending to the immediate challenges faced by the companies and their workers. I hope that companies and workers would draw comfort and confidence from observing this move, knowing that the Government and Tripartite partners will always act in their best overall interests of both our workers and companies.
I will like to seek a clarification from (Manpower) Minister with regards to the transition offset package. This was mentioned in previous speeches that when you increase the CPF contribution rates, the Government will consider a transition offset for part of the cost that the employers have to bear, in other word the Government is co-paying with the employers for the improvement for the workers. This will certainly make it easier for the employers to implement this and to benefit the workers. I hope to seek this clarification from minister whether the package will put out.
I now return to the Coastal Protection analogy. Building sea walls are necessary. But they are not sufficient to ensure key infrastructure can keep above the waves of change. Which is why it is necessary to also raise the height of building foundations well above current sea level, so that they can stay dry longer.
This too is similar to what we must do to continually to shore up the employment and employability of older workers for the journey ahead.
Over the years, Government has introduced numerous hiring and training incentives that favour the older worker. Examples include the Senior Employment Credit, the Senior Worker Early Adopter Grant and the Part-time Reemployment Grant and various others.
These financial incentives have indeed been very helpful in lowering the cost of hiring of mature workers. I am glad that the efforts of the Tripartite Partners and the responsible actions by the vast majority of firms have kept the employment rate of older workers stable despite the COVID-19 onslaught. In fact, the employment rate for older workers 65 years and older actually showed a small increase in 2020 compared to 2019. Government has also provided preferential subsidies for the training of older workers for many years now.
While wage subsidies to lower the cost of hiring of older workers would certainly help, they are also not the longer-term safeguard that is needed. For analogy, they are like good sandbags and other portable flood barriers – useful in minimising damage but do not reduce the inherent vulnerability of the premise to flooding if the premise itself is too low.
That is why we must still undertake the hard work of raising the foundation levels. This is the ultimate way to help keep premises above the rising tides. In like manner, effective improvement in the Employability of Older Workers is the ultimate way to help as many of them as possible stay above the rising tides of skills obsolescence and workplace value depreciation.
There are very clear signs that we need to pay close attention to and act on it.
I said earlier that the employment rate of older workers has held steady and even improved slightly between 2019 and 2020, despite the COVID-19 pandemic. I should qualify that that was so for workers aged 55 and above.
NTUC and SNEF co-led a Taskforce to examine the needs, hopes and anxieties of PMEs over the past year. Their report was recently submitted to Government. It is clear from the report that the anxiety over job insecurity among those aged 40 to 60 is palpable.
To be sure, this anxiety was already there before COVID-19, it came about as a result of business model changes, delayering of middle management and technological changes. COVID-19 accelerated and intensified these factors.
Sir, safeguarding the employability of the mature worker from early middle age must now be a central focus of policy research, planning and formulation. We must not wait till they are near retirement age. This must go hand in hand with ensuring a level playing field for Singaporeans in being considered for job openings. This is so that middle aged local workers won’t be too easily or prematurely rendered unemployable and have to exit the workforce. Otherwise, legislative improvements to retirement and re-employment ages would be rendered moot.
Equally importantly, we must know that policy and incentives are necessary but not sufficient to ensure the required outcomes. Effective last mile implementation is critical to ensuring real and sustained outcomes.
What needs to be done? I suggest 3 focus areas for consideration:
(a) Invest even more to further boost the capacity and effectiveness of job retraining and employment facilitation mechanism. We must give due credit to the work of WSG, NTUC e2i, SSG and NTUC’s Company Training Committees (CTCs) and its Job Security Council (JSC) for helping thousands of jobseekers each year retrain and find new jobs. Many of those helped are mature workers.
At the same time, we must recognise that the size of the mature local workforce will grow rapidly in the coming years, and changes in the business environment will only accelerate. Therefore, we must consider whether our current mechanisms in facilitating retraining, career guidance and job matching on an individual, inter-company and inter-industry transfer level, will have the required capacity and effectiveness to tackle the heavier loads that we anticipate that are on-coming.
If we do not get this right, there will be a growing pool of displaced, disillusioned, and disgruntled mature persons in society. As I emphasised earlier, effective implementation of the last mile is the key to actual results.
(b) Factor in more episodes of displacement and configure help for the in-between. Every worker must expect multiple episodes of employment through working life. This means that it will not be lifelong employment for most. This in turn means that workers will need more help in between jobs to tide over as they job-search, and as they re-train. This is especially so in the cases of involuntary job loss.
While it remains true that we must not encourage pickiness on the part of jobseekers, we must also recognise the real downsides of being forced by circumstances to repeatedly take jobs that pay worse or under-utilise ability, without reasonable alternatives. The latter will come back to haunt society in weakened retirement adequacy and frayed social fabric.
Thus, we must review and strengthen social support to target the breaks in income that will inevitably affect more people and reduce the cost of their active retraining, conversion, or job search.
(c) Review the structuring and conduct of CET. It is common to hear training being divided into 2 phases – Pre-employment trading. (PET) which refers to the “schooling years” before starting work, and Continuing Education & Training (CET) during the working years.
Investments in PET over the decades have been immense. This correctly reflects the Government’s recognition of our people as our most important asset, who must be developed and tapped on to their fullest potential.
Government funding for CET has also grown substantially over the years, via course fee subsidies, absentee payroll, paid internships and conversion programmes for mid-career workers. There are also the SkillsFuture credits granted to all Singaporeans aged 25 and above for self-initiated skills development.
The fast-changing environment creates serious uncertainties that confound both workers and companies over what training would be purposeful for whom. This generates inertia at the company and individual level. The result of inaction or aimless training is skills obsolescence followed by loss of employability. The risk is that more and more of our nation’s human potential will be wasted earlier this way if the uncertainty continues.
This problem cannot be tackled just by introducing more schemes or subsidies. The current operating landscape may be too fragmented and cannot offer pervasive and sound guidance that links training to ops-tech future planning in companies. More structure, anchoring, shared services and periodic check-ins at company and individual levels would be needed to produce the required last mile outcomes for the majority of mature workers, starting in their 40s. This must be carefully and seriously studied, so that the current ecosystem can be reshaped to help mid-career mature workers hone and update their skills and strengthen their value, employability and adaptability.
Mr Speaker, Sir, the Government and tripartite partners have worked hard over the years to strengthen support for older workers. We must continue to do so, especially given our aging local workforce. We must fight ageist workplace practices and give our older workers a chance and a choice to continue working. To do so successfully, we must not only extend the working ages by law or help make hiring cost-effective through wage subsidies. We must also tie our policies, resourcing, partnerships, and implementation more tightly together. This is so that mature workers and their companies will update their skills more rapidly and purposefully. This will then help mature workers grow with their companies and be more able to quickly move into new jobs and sectors if displaced. This will be crucial in helping mature workers keep their value and sense of security and view the future with optimism.
Before I end, I will like to make a point shared by Professor Jamus Lim, when he recounted what some of his residents shared when they lost their jobs in their mid-50s and approach employers and the employers told them that they (employers) can’t keep them for long as they are near their the retirement age. Earlier Minister had clarified that raising the statutory retirement age, is not to force any worker to work beyond what he or she wants to. It is to protect him or her from an ageist employer who cites no other reason than age to say bye bye to him or her (employee). Employers should not misinterpret this to workers. In that particular example, for that employer to tell Professor Lim’s resident that he is too near the retirement age suggests that the employer was prevented by law from hiring the older worker as he’s too near the statutory retirement age. Which is false. We should make this point clear to employers and workers.
I support the Bill.
Thank you.
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